Can You Settle A Case and Not Subsequently Be Sued For Malpractice? You Probably Won’t Like the Answer . .

By Alvin I. Frederick

A lawyer cannot settle a case today without submitting to risk for a later malpractice action. Even worse, the measure of damages would not be on the "fair settlement value" of the case, but the "verdict" value of the case - at least in Maryland in the wake of Thomas v. Bethea, 351 Md. 513, 718 A.2d 1187, 1201 (1998).Given the parameters of Thomas, the lawyer may be better off by simply telling the client that there has been an offer made and not offering any real advice. Imagine being in the doctor’s office and being told that you may either elect to have surgery or not. The doctor would offer no further guidance or opinion, and you would be left to throw a dart and take a wild guess. This seems to be what the Thomas court is suggesting lawyers do with their clients.

Cases that are significant in value (six figures or higher) are less likely to be the target of Thomas type suits. It is more likely that counsel will first have gone through a mediation where the mediator assigned a value to the matter. In addition, counsel probably will engage a well-respected plaintiff’s lawyer to evaluate the matter on behalf of the lawyer.

The genuine area of concern relates to settlements in low five figure amounts. Is it likely that an attorney in a $10,000 case will go to the cost and expense of a mediation and a second evaluation by another lawyer before recommending a settlement? Another concern is that many states use a "discovery" statute of limitations. The statute does not begin to run until the client knows or has reason to know that there has been an act of malpractice. It would be impossible to put a case behind you knowing that at any time a client might "discover" a claim for insufficient settlement.

To minimize your malpractice exposure, advise your clients that a settlement demand being made in their matter is not necessarily reflective of the true value of the case, that litigation is by no means a science, that the outcome of litigation is never predictable, and that the value of the case may be zero. It all depends on a variety of factors and none can be controlled. Another possible technique to minimize exposure would be to have the court voir dire the parties and allow the lawyers to make a proffer as to what they would prove, and make a finding that the settlement is fair andreasonable.

The best solution would be to have the Court of Appeals reverse Thomas v. Bethea, and that does not seem to be beyond the realm of possibility once the ramifications of the decision are clear to the judges on the appellate level.

Alvin I. Frederick is a principal in the firm of Eccleston and Wolf, P.C., a regional law firm serving Maryland, Washington, D.C. and Northern Virginia. He concentrates his practice in professional malpractice defense and professional responsibility.